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Md. House Takes Up Transportation Funding Bill

ANNAPOLIS, Md. — The Maryland House of Delegates gathered for an evening session Wednesday to take up a transportation funding measure that supporters say is badly needed, but opponents deride as a terrible burden on Maryland drivers.

Republican opponents were quick to criticize the proposal. Delegate Andrew Serafini, R-Washington, said the legislation’s tax provisions would raise costs for many other goods that need to be transported to stores.

“We’re going to pay for this tax multiple times over,” Serafini said at a news conference outside the House chamber.

The House Ways and Means Committee changed the bill earlier this week with an eye toward phasing in tax increases more gradually, while raising roughly the same amount as the plan Democratic Gov. Martin O’Malley pitched earlier this month. Under the changes, a new 1 percent sales tax would be applied at the wholesale level on July 1, instead of the 2 percent in O’Malley’s plan. The sales tax would increase to 2 percent on Jan. 1, 2015, instead of the 4 percent under the governor’s initial plan.

O’Malley’s plan would have cut 5 cents from the state’s 23.5-cents-per-gallon excise tax, but that reduction was eliminated under the bill changed by a House panel.

The House Ways and Means Committee also changed a part of the bill that hinges on whether Congress passes legislation to allow states to collect a sales tax on Internet sales. Under O’Malley’s proposal, the state would have been able to increase the sales tax from 4 percent to 6 percent, if Congress fails to pass an Internet sales tax law. Under the changes made by the House, the 3 percent sales tax would jump to 4 percent in January 2016 and 5 percent in July 2016.

The proposal also includes a mechanism to increase gas taxes in the future to keep up with inflation by linking the gas tax to the Consumer Price Index. Maryland has not raised the gas tax since 1992, and supporters of raising the tax this year note that the buying power of that tax has dropped considerably over the past two decades.

But Delegate Ron George, R-Anne Arundel, criticized the automatic nature that future gas tax increases would take under O’Malley’s bill.

“His legacy of the eternal gas tax will continue to haunt Maryland motorists for many, many decades to come,” George said.

Leaders in the state’s business community have supported the measure. They say the state’s businesses and quality of life need the investment in infrastructure. If no action is taken, they note, Maryland will run out of money for new transportation projects after 2017.

O’Malley proposed phasing in a 6 percent sales tax on gasoline last year, but the proposal stalled.

Virginia GOP Gov. Bob McDonnell recently won approval for overhauling his state’s highway maintenance system by raising diesel and retail sales taxes and creating a mechanism for a potential future gasoline tax hike.